May 6, 2013


  • This is one of the best programs I've seen to accomodate members while their in one of the worst real estate markets. Your credit union should be very proud. I also agree that an underwater loan is not an automatic TDR. Continue to help your members and possibly all credit unions will realize, we're here to help our members.
  • Those underwater modifications sound like TDRs if they can't get comparable terms in the market.
  • Not necessarily TDR's. Does underwater really mean financial distress? Being underwater does not mean you have an impaired ability to make your payments. You can be filthy rich and have properties that are underwater due to a substantially declining housing market. I don't see where borrowers like this meet the GAAP standard of financially distressed. You may consider the loan to be distressed but the borrower sure isn't. I don't mean to sound like I'm attacking. TDR's are a pet peave of mine. We should not so easily give in to what constitutes a TDR. Some are clear cut some are clear as mud. I hate the part where they say "could not otherwise get financing at market rates from another FI". I've been doing this for 22 years. I am no longer shocked by anyone's ability to refinance a loan somewhere else at market rates. And don't forget, not everyone is risk base priced - just look at State Employees of NC.